03.08a. Martha Stewart Case; Obstruction of Justice; Lying to Police, an Economic Approach. Amidst all the comment on the Martha Stewart case, I think the most important point has been missed: the law under which she was convicted is a bad law. I don't mean the securities laws--- that malicious and silly charge was kicked out by the judge. Essentially, what she was found guilty of was lying to policemen. I don't think that should be a crime-- and certainly not with a five-year sentence.

Here I will depart from her particular case, since I haven't been following it, and go straight to what I think is the main law in question, USC 18-1001. I've boldfaced the part I want to focus on.

TITLE 18, PART I, CHAPTER 47, Sec. 1001

Sec. 1001. - Statements or entries generally

(a) Except as otherwise provided in this section, whoever, in any matter within the jurisdiction of the executive, legislative, or judicial branch of the Government of the United States, knowingly and willfully -

(1) falsifies, conceals, or covers up by any trick, scheme, or device a material fact;

(2) makes any materially false, fictitious, or fraudulent statement or representation; or

(3) makes or uses any false writing or document knowing the same to contain any materially false, fictitious, or fraudulent statement or entry; shall be fined under this title or imprisoned not more than 5 years, or both.

(b) Subsection (a) does not apply to a party to a judicial proceeding, or that party's counsel, for statements, representations, writings or documents submitted by such party or counsel to a judge or magistrate in that proceeding.

(c)With respect to any matter within the jurisdiction of the legislative branch, subsection (a) shall apply only to -

(1) administrative matters, including a claim for payment, a matter related to the procurement of property or services, personnel or employment practices, or support services, or a document required by law, rule, or regulation to be submitted to the Congress or any office or officer within the legislative branch; or

(2)any investigation or review, conducted pursuant to the authority of any committee, subcommittee, commission or office of the Congress, consistent with applicable rules of the House or Senate

Whoever, in any matter within the jurisdiction of the executive, legislative, or judicial branch of the Government of the United States, knowingly makes any materially false statement shall be imprisoned not more than 5 years.

What this law says is that if you tell a lie to a federal official, you can be put in prison. Let's think about that.

First, this is not a law just against perjury. There is no requirement that you be under oath. The lie does not have to occur in a courtroom or a government office. As stated, it does not even have to be a lie to a federal official-- it could be a lie to a friend.

Second, your lie does not have to cover up any crime. As stated, you would have to go to jail if you deliberately told the census taker you were a Methodist when you were really a Catholic. Or, as in Martha Stewart's case, it might be that you hadn't committed any crime, but federal police came by thinking maybe you had, and you were afraid what you had done might have been criminal too (even though it turned out it was not), because federal regulations are so intricate, and so you lied. Bang, you go to jail, if the Justice Department decides it doesn't like you or wants the publicity.

Third, no Miranda warning is going to help you. The idea of the Miranda warning is to stop you from incriminating yourself of your previous crimes-- a bad idea, by the way, but there you have it. Here, however, there doesn't have to be any previous crime. So you don't get a warning. You will be committing a crime once you lie, and at that point I suppose the policeman must give you a Miranda warning if he wants to ask you "Did you just lie to me?" and use your answer as a confession. But by then it's too late.

Thus, this a powerful law. Can you escape its reach? Well, you could always tell the truth, which is a good thing to do. But I don't think 5-year federal prison sentences for lying are appropriate, particularly since we don't enforce the law uniformly. (Note, by the way, that a lot of politicians would be in prison if we did enforce it--- and that's not just a joke--- they do tell material lies a lot about matters of public policy.)

I need to find out from a lawyer about a second way to escape: refuse to talk to federal investigators. If that is legal, then my advice is to refuse to cooperate with any federal investigation, however peripheral and safe you might seem and even if you are sure no crime has been committed. Make them come back with a subpoena and make sure you have your lawyer on hand, and so forth.

This points to a law-and-economics reason for repealing the law: the law's effect is to hinder investigations. The police should want to encourage people to talk to them, not discourage them. In fact, ordinarily I bet it is more useful to the police to have someone tell them lies than to have the person keep quiet. Police are expert in sifting through lies and half-truths, but nobody can extract information from silence motivated by fear that talking will get the speaker in trouble regardless of whether he committed any other crimes.

I'll have to find out more, and maybe write on this. Maybe I can do a follow-up on my Cardozo article, cited below.

Eric Rasmusen, "From Miranda to Mezzanatto: The Economics of Self Incrimination," Cardozo Law Review (May 1998) 19: 1541-1584. A 1995 Supreme Court decision allowed defendants in criminal trials to waive their rights to block use of information disclosed by them during the plea bargaining process. Does this really encourage plea bargaining? ( http//Pacioli.bus.indiana.edu/erasmuse/published/Rasmusen_98CARDOZO.mezz.pdf)

Update, later that day. Via Eugene Volokh, I find The Technoptimist says

Don't lie to federal investigators. Sure they can (and in many cases are professionally required to) lie to you but since they are your social superiors, you can't return the favor. You are not even allowed to merely say you didn't do it. In Brogan v. US, the defendant falsely answered "no" when federal agents asked him whether he had received any cash or gifts from a company whose employees were represented by the union in which he was an officer. He was indicted on federal bribery charges and for making a false statement within the jurisdiction of a federal agency in violation of 18 U.S.C. Sec. 1001. A jury in the District Court found him guilty. The Second Circuit affirmed categorically rejecting his request to adopt the so- called "exculpatory no" doctrine, which excludes from Sec. 1001's scope false statements that consist of the mere denial of wrongdoing. The Supremes upheld his conviction. So one simple no is enough to send you to the Big House.

...

...So if you happen to go to your newsstand tomorrow and buy a paper from the new owner who you recognize as Osama, don't tell the Fibbies. You're not required to and any communication with them opens you up to 1001 liability.

You never have to talk to them unless you are in court in response to a subpoena or other compulsory process.

You may be compelled to fill out their forms (which as you noted can give rise to liability) but talking to them can only be compelled by judicial order.

As an example, suppose you are called as a witness in a judicial proceeding. Those who watch court dramas are familiar with the prosecutor prepping his witnesses before trial. Even this is voluntary. You only have to show up in court you don't have to be prepped.

In the clear case where an FBI agent walks up to you and asks you something, you can just say "get lost" (though politeness is reccomended).

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